Consumers have fixed Nike's supply chain problems.
People stopped buying Nike shoes and clothing.
Nike's inventory rose 44% this summer as back-to-school sales were a bust. As the Christmas shopping season begins, Nike is slashing prices.
Fox 29 in Philadelphia reported, "According to a report by The New York Post, Nike said it's planning to offer sales of up to 44% overall and 65% in North America.
"The company is blaming supply chain issues for a lag in product movement which resulted in the company overstocking some items while others arrived late."
A 65% drop in prices isn't a sale. It is the Freddy Krueger plan to dump inventory because you are running out of space in the warehouse.
Don't take my word for it.
CNBC reported, "Nike on Thursday said it had a strong first fiscal quarter despite supply chain issues, as well as declining sales in [Red] China, its third biggest market by revenue.
"But Nike’s shares fell more than 10% Friday after the company described problems with overstocked inventory levels and the aggressive steps it’s taking to lower them."
This ain't temporary. This is the recession taking hold. That 10% drop in the stock's price was not seen as an opportunity to buy.
MarketWatch reported, "Argus downgraded Nike’s rating on Monday from Buy to Hold. According to analyst John Staszak, the company’s high inventory level--which was observed to have climbed by 44% to $9.7B in the fiscal first quarter of 2023--is the reason for the downgrade on the athletic apparel behemoth.
"According to Staszak and crew, Nike will have to lower prices to get rid of this inventory, which will have an adverse effect on margins and earnings in the upcoming quarters."
Nike is not the only overstocked product. Retailers cannot move merchandise.
Bloomberg reported, "The inventory glut that dragged down U.S. retailers over the past two quarters may only be getting worse. For shoppers, that means better deals.
"Inventory levels have increased sequentially and are at the highest level relative to sales since the start of the pandemic, UBS Group AG analysts led by Jay Sole said in a recent note."
Translation: the economy is doing worse than it did in the pandemic lockdown.
Bloomberg also said, "Americans have largely shifted their spending away from things like apparel and footwear in favor of travel and entertainment — leaving retailers with far more merchandise than they can sell at full price. At the same time, slower economic growth, inflation and higher interest rates are adding to concerns that consumers may slow their purchases in the second half of this year."
Economic growth? It doesn't exist.
The nation entered a recession on July 1 after two consecutive quarters of shrinking economic activity. The media and the government are going out of their way to obfuscate the condition but people know that hard times are coming. Stock prices overall have tumbled by more than 20% so far this year.
While unemployment remains low, that will not last. Buyers are staying home.
The good news is the recession will bring down prices.
The bad news is it may trigger deflation, which will really screw up the economy. The last time we had deflation, it took a world war to cure it.
And, like the last time around, we seem to have the clowns in charge hell bent on taking us into another war. Between that fat little man in North Korea, Putin, and Iran - not to mention Zelensky urging the US to push the button preemptively, I am not sure where the first strike will come from.
ReplyDeleteThen again, we have let so many folks into our nation over the non-existent southern border that we should probably expect some sort of foreign terrorist activity here at home.
On that note, has anyone noticed all of the food-related processing and distribution facilities going up in smoke lately?
Looks like WWIII might have already started here at home.
Keep up the FUD, Jeffery. Most of the Hispanics just want a place to make a couple of bucks.
DeleteEd, lots more than Hispanics flooding across the border. 16% of those caught came from Asia. How hard would it be for Russia or China to send saboteurs across our southern border?
DeleteI agree that most Hispanics simply want to work, but we'd be better off if we had all the American born kids employed first.
Daaamn, Special E.D. Just when I thought you were acting civil again.
Delete"...sort of foreign terrorist activity..."
From the NYPost:
https://nypost.com/2022/08/30/abbott-81-suspects-on-terror-watchlist-found-at-border-in-biden-era/
Plenty of other sources to back up this story.
If I had the inclination, I could show you several stories on food supply disruptions.
Do your homework.
-lg
quit blowin for dollars
DeleteNike went woke. Now they csn go broke.
DeleteDeflation is good for the consumer.
DeleteEd , BinT is correct . Too much of a coincidence that these events are all occurring simultaneously. Some nefarious group will take advantage of these conditions.
DeleteAlso Canada has let 30,000 chinese military boys remain in country and have positioned them along the US border for over a year now, crickets ……….
DeletePeople saying that the hispanics coming over just want to work, are imagining things. That is NOT the case today. Maybe in the past but if you go to El Paso, you will see what the situation is and it's horrific. All that is missing, is the uniforms and weapons. There's a military invasion happening. These are not fruit pickers like Piglosi spoke about nor are they Walmart something or rathers.
DeleteIt's possible some consumers of Nike products have stopped their purchases because they learned of Nike's use of slave labor.
ReplyDeleteEN2 SS says;
Deletenike died the day they sucked up to the pisspoor football wannabe.
Yep
DeleteYup.
DeleteAbsolutely. Then on top of that they went completely "woke". Hope they go down the tubes completely.
DeleteAfter Nike's anti-American ad campaigns I vowed NEVER to buy anything from that brand again.
DeleteDitto here. Nike lost me years ago.
DeleteLake Life
Exactly. Stupid idiotic marketing
DeleteGo woke go broke. I tossed everything I had with a Nike logo. They lost me 4-evah.
DeleteI think it's more Nike's politics rather than from the recession. We'll see, won't we :)
DeleteNike can kneel itself out of business for all I care.
DeleteOut of control inflation means recession. Always. That's just the way things work. Any talk about a "soft landing" is a lie. You don't need a degree in economics to understand it.
ReplyDeleteFunny, I don't think gun stores are burdened by overstock....
ReplyDeleteSpringfield Armory, Smith & Wesson, Glock, Colt's Manufacturing, Kimber, Sturm, Ruger & Co., Sig Sauer, Beretta, H&K, Mossberg, Winchester RAC, and a hundred more firearms manufacturers, along with Remington, Nosler, Hornady, PMC, CCI, Norma, Fiocchi, Alliant, Hodgdon/IMR, the list of prospering manufacturers of firearms, bullets and powders goes on and on. Their problem is not demand; it is an inability to produce enough product to satisfy demand. Ask any metallic cartridge reloader or dedicated shooting sports enthusiast. As far as I know, not a single one of these companies has taken a knee, supported BLM, or boycotted any state. Could be that correlation does suggest causation.
ReplyDeleteIn Canada it is impossible to get any pistol primers for reloading.
DeleteI wonder if the Dems , knowing they are gone, are trying a setup to screw everyone so they can ride in and save the day except there's no one left
ReplyDeleteProbably - except no one really trusts them to do that - so the only thing that happens is that the GOP base, which is MAGA, will take it out on Mitch's group, the RINO's, and the dem's will be left out. The anger in red states is beyond hot right now. There is no blue energy in any state at all, just blue status quo. And it's all bad and will shrink even further after this next election cycle.
DeleteThe dems are preparing for a transformation of their own. Except it is transforming into something many of their voters won't agree with, and we see those fights everyday - gays v. trans, and educational tiger moms vs the education establishment. the left is further dividing and shrinking itself. The right is growing, except the right has already started the metamorphosis - and it is a broad party with regional variation to take care of social issue differences within the coalition. The left is forcing submission and is burning the heretics.
So in the end you will see a larger GOP party - what is happening with registration roles in PA and FL are just the tip. A shrinking dem role. And the movement of independents to being more aligned with dems than GOP, because GOP aligned independents are already moving towards GOP.
If Mitch and the US CoC weren't closet democrats, this would happen quicker.
But its going to happen none the less.
Could well be but corrupt criminal dems are desperate, put nothing past them including declaring a "national emergency" over ukraine or russia, and cancelling mid terms. Would then fully expect states to tell Washington to pack sand, and conduct elections anyway, in brandons face!!
DeleteNah, it can't happen anywhere it would help them - and probably violates federal election law. It's now baked into the cake. The dems are going to lose control of congress, it is just a matter of how bad, before they are forced to defend even more senate seats and the WH in 2024 - with the carry on losses of democrat House seats as well.
DeleteEconomic growth?
ReplyDeleteWait until the smart set realizes like the rest of us have, that the US political and corporate elite have offshored most of the US Manufacturing base to communist China, Mexico, India, Vietnam and the rest of Southeast Asia over the past 30 years. What economic growth are they hoping the Magic Unicorn will bring?
And it is all coming back. China is dead. Everyone is moving things to another SE Asian Country (Vietnam is very popular right now), Mexico, or the US. And states in the US with poor business environments - think west coast, IL, NY for example, will lag in this new investment, and become poorer relative to the rest of the country. Where the Texas triangle, the old rust belt (absent IL), and the sunbelt will do really well.
DeleteLooks like Buttpeg amy be wetnursing his son full time.
ReplyDeleteThe last time we had deflation, it took a world war to cure it.
At 8.3%, we need some deflastion.
WW II cured nothing but Germany and Japan. Inflation is a phenomenon of monetary policy. Period. We are seeing the result of the Fed purchasing $120B monthly in Treasuries over a period of at least two years (aka quantitative easing), $120B/month injected into the banking system with no corresponding output in goods and services. Fiscal policy (tax and spend) has nothing to do with inflation other than providing a motivation for inflationary monetary policy (the Federal Reserve). Fiscal policy deals with money already in circulation, whether taken in taxes or taken from the banking system via the sale of Treasuries
Delete"Consumers have fixed Nike's supply chain problems.
ReplyDelete"People stopped buying Nike shoes and clothing."
God Bless the journalist who knows how to get to the point.
CNBC reported, 'Nike on Thursday said...' "BUT..." (capitalized for emphasis)
ReplyDelete"But" is Jill Biden pushing Joe under the bus.
There is a steep decline in some of Nike’s core clientele- rappers and thugs.
ReplyDeleteAren’t they the same thing?
DeleteSuzq22-Quit buying Nike when they ditched the Betsy Ross flag.
ReplyDelete"We are the largest sport brand [in China], and we are a brand of China and for China"
ReplyDelete~ Nike CEO John Donahoe - June 2021
Let the Chinese help with them, then.
Go Woke go Broke. Nike is one of the wokest.
ReplyDeleteStopped buying Nike when I learned about the Uyghers. Then I stopped buying Chinese products, as much as possible. Now, I'm shifting to trying to find quality American made products. Just bought some furniture that is being made in my state. Buy local, folks. Stimulate the economy and feed small and medium sized business. Everyone that deserves to win, wins. And those big companies who need to lose, need to start losing. Eventually they won't be able to deny why.
ReplyDeleteFootlocker has lessened its dependence on Nike. As a retail outlet FL used to have 3/4 of its store space devoted to NIKE, now much of that space is held by NIKE competitors like Adidas, PUMA, Reebok, New Balance, crocs, converse, vans.
ReplyDeleteBloomberg said 'Americans have largely shifted their spending away from things like apparel and footwear in favor of travel and entertainment...'
ReplyDeleteNo, they are spending money on gas and food, and getting ready to lose their jobs - Thanks Joe. AND, all the free money from de' Gub'ment getting sent to the takers has dried up.
How about the fact that there product is insanely expensive. That is why they are tanking.
ReplyDeleteThe reason their sales are down is why should anyone buy Nike when they can loot it?
ReplyDeleteNike’s supply chain chain was disrupted when the CCP put all the Uighur children in “vocational education camps”. No child slaves left to make the shoes.
ReplyDeleteI saved money to buy my first pair in the 80s - now I refused to wear their logo ever again after all the pandering to BLM, kneeling, and a marketing campaign designed by woke college co-Ed’s. Marketing and the Art Director who envisioned it should be fired as they lost so many customers. It’s all produced with Chinese slave labor anyway. Bush Bye NIKE.
ReplyDeleteI live in Oregon and hate everything Nike stands for!
ReplyDeleteI wouldn’t wear their products if I was paid too…
Beaverton Oregon ditto's
DeleteRoseburg, OR is with you too!
DeleteThey need to roll out more krapernick or leshame commercials.
ReplyDeleteWhen they gave a huge contract to the clown that wouldn't stand for the national anthem, I threw my Nike in the trash and didn't look back.
ReplyDeleteWe burned ours
DeleteHey Don... it's *not* oversupply. Americans are voting "NO" with their dollars! NO for Nike!
ReplyDeleteAmen to that
DeleteI wear $8 deck shoes and $35 side zip jungle boots here at rancho Costa nada. I go to auctions and see beautiful slabs of walnut and cedar. I see beautiful dining room tables made by Amish craftsman from those same walnut slabs.
ReplyDeleteI wouldn't wear Nike if they paid me. When they decided to give the player I won't name that started the kneeling in the NFL a contract the level of an Aaron Rogers or Michael Jordan and he wasn't even playing any more I said nope I won't give them a cent. Won't wear it if they paid me because it would be advertising for them. Unless I could use it for painting around the house. Even them I wouldn't like it. At least until I painted over the logo
ReplyDeleteIt seems Nike and journalists don't want to discuss the elephant in the room... a boycott of woke companies.
ReplyDeleteWhen I was in school in the 70's, my mom worked at a shoe store. One day, she brought me home a box of tennis shoes. White leather, with the red nike logo. They were called Leather Cortez. That was 1974. I HAD worn ONLY that type of shoe all my life when not working. When Nike went woke several years ago, I refused to wear them, and haven't worn them since!
ReplyDeleteSCREW Nike'.
Those were some great shoes.
DeleteMy sister's father-in-law was a pretty blunt man. He once made me laugh so hard when he asked my sister why they were buying their sons cheap Chinese sneakers and paying an extra $100 or more for them because they had a "check mark" on them!!!
ReplyDeleteVery wise man!!!
"On average, each American owns six pairs of sneakers"
ReplyDeleteYeah. When there's a money crunch due to inflation plus stagnant wages (suppressed by massive amounts of illegal immigration), not many people find a real need to spend >$100 on yet another pair of sneakers made by slave labor in a concentration camp.
They are finding out the hard way that white people are not only still the majority in the nation founded by white people for other white people, but that white people have the most money and don't like being told that they suck by a company that uses SLAVE LABOR, and supports the grooming and rape of children by degenerate homosexuals!
ReplyDeleteI can't even afford my small tv dinners anymore. Living on eggs, noodles, bread & peanut butter these days. Biden's masters did this to my life.
ReplyDeletewish ppl weren't buying Nike b/c it's CCP shoe plantation slave made
ReplyDeleteIt has nothing to do with inflation or the poor economy. They went woke and pushed socialist propaganda, and left wing ideology. People stopped buying their junk.
ReplyDeleteI quit buying their products when they hired Kappernick
ReplyDelete